Ron Orgiefsky, managing director, emnos; and Todd Bida, director of business development, emnos, have some enlightening views about retail loyalty programs, their popularity and necessity.
Loyalty360 talked to Orgiefsky and Bida during a compelling interview about the state of retail loyalty programs.
Can you talk about the current state of retail loyalty programs now?
Loyalty programs have never been more important in retail than they are today. With the feeling of being “rewarded” or special becoming a large part of a positive customer experience, loyalty has become a good proxy to identify those for whom the customer experience is likely a good one. That said, someone who is highly engaged with your loyalty program may not necessarily giving you positive marks for customer experience. He or she may just be very price-sensitive, and if your loyalty is only about discounts (versus access to exclusive items or experiences) than you will have to look deeper before you link the two.
That is where opportunities abound for retailers to migrate and 24/7/365 evolve their loyalty programs past the early wins associated with the overlay of demographic data. Often built years ago, these platforms did not anticipate the wealth and different types of data accessible today. Loyalty programs have a large opportunity to scale and tailor their programs to match their customers’ wants and needs. This is the future: Personalization for the already personalized.
What are marketers doing well related to loyalty programs and where do the challenges lie?
With the average consumer belonging to somewhere between 24 and 29 loyalty programs, depending on which study you read, but only being actively engaged in 25 percent of them, a marketer has to really understand how to make it into that select six or seven actively used program group, and how to stay there. The answer to both questions lies in the data. The “why behind the buy” and the answers to the how, when, who, and what are all there in the data.
And marketers know the importance of this data, this is where they are doing well. The awareness of the magnitude of this information, how it impacts their customers, and the value-add for them is more top of mind for loyalty teams than ever. Those that are doing it very well have fully integrated this data into an omnichannel approach.
As just one example, these loyalty programs are not integrating and maximizing the impact of ‘other’ data that can be mined from social media posts. Integrating e-Commerce data, with purchase data, with social media insights, can only improve a retailer’s chances of creating high impact personalized experiences, outreaches, and campaigns.
At emnos, we have built automation and scalability that sit at the core of our tools to eliminate the pain of ‘really complicated’ data sets and data integration work. We believe that there is a great opportunity right now to simplify these processes, to make the business users lives much easier, and to make it much easier to roll up and leverage all kinds of different data sources into a retailers’ process for maximizing the value that consumers derive from them.
How has customer loyalty changed in the past five years or so?
A recent Microsoft consumer study claims that the human attention span today is eight seconds, down from 12 seconds in 2000. It is against this backdrop; with aggressive price competition and the commoditization of everything consumable via ‘best price’ shopping and Amazon; and the simultaneous exponential increase in the amount and types of content broadcast at consumers on a minute by minute basis) that loyalty is under siege. Retailers must be ever more vigilant in gaining and maintaining their customers’ interest and loyalty to stay on top. This is where the space has evolved. Today, loyalty programs are becoming more of a social platform for consumers to connect and engage with a brand making relevant content extremely critical in addition to offers. From this, we know that engagement, especially positive engagement, leads to loyalty.
What is the biggest missed opportunity when it comes to retail loyalty programs?
Personalization. Many retailers think they have ‘checked the box’ on personalization with ‘you bought XYZ yesterday, why not try ABC today’. These basket expander suggestions are not enough. Consumers crave being ‘understood’ and when they feel that from a retailer, that retailer wins their attention and a bigger share of wallet.
Ensuring no opportunity is missed to build longer-term relationships. Train store personnel to create strong customer experiences by recognizing the markers of a loyal customer. Checking into a Hilton or Marriott comes to mind–when they know you are a frequent guest, they acknowledge that and thank you for your business. After you swipe your loyalty card at the grocery store and you then are “known” to the cashier, why can’t they do the same thing as the front desk person at the hotel?
If a customer cares enough to call into customer service with a concern, then thrill and delight them in that call. Free shipping, extending the expiration date on an expired coupon, or an instant courtesy credit can go a long way towards retaining a high-value consumer who has a choice of where they can direct their spending.
What are some trends you're seeing now related to customer loyalty or some we might see in the future?
As consumers have become more fluid in how and when they engage in various channels: for buying, researching, and discovery, so too must retailers and the loyalty programs they maintain. The winning retailers will be those who make the shopping experience and the engagement with the loyalty program consistent across channels and supportive between channels. The data analytics and insight work required behind the scenes to drive all of that must ensure that they can operationally function with a holistic view of the shopper through their data systems to enable delivery of real-time, relevant, personalized offers, content, and trigger engagement that will be the right call-to-action at the right moment for their loyal customers.